SBA Financing Window Opens for Bed and Breakfast Inns

Good news on the bed and breakfast financing front for 2010. The SBA has opened up a window of opportunity, making 2010 a great time for buyers of hospitality properties.

SBA 504 loans now offer a bank guarantee, thereby greatly reducing default risk, which in turn is creating a more active secondary market for the loans. Banks which underwrite 504 loans may now resell up to 85% of their positions into the secondary market, and get paid 3-5 points for the privilege. Hoorah!

The "window" is slated to stay open until February 16, 2011, or when the pool reaches 3 billion, whichever comes first. The impact of this program has farreaching effect, yet is virtually unknown to all but the most informed bankers. As word gets out, we anticipate that more banks will be interested in underwriting these loans, a win-win situation for all.

Anyone still dreaming of buying a bed and breakfast may have that opportunity during the next 10 months, so go on, get out there and start looking. It's a buyer's market!